8-K

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 24, 2006

CMS Energy Corporation
__________________________________________
(Exact name of registrant as specified in its charter)

Michigan	001-09513	38-2726431
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
One Energy Plaza, Jackson, Michigan		49201
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 517-788-0550

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Consumers Energy Company
__________________________________________
(Exact name of registrant as specified in its charter)

Michigan	001-05611	38-0442310
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
One Energy Plaza, Jackson, Michigan		49201
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 517-788-0550

n/a
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.01 Entry into a Material Definitive Agreement.

On July 24, 2006, Consumers Energy Company ("Consumers"), a wholly owned subsidiary of CMS Energy Corporation ("CMS Energy") signed a Stock Purchase Agreement (the "SPA") with MCV Power Partners, Inc. ("MCV Power"), an affiliate of GSO Capital Partners LLC and Rockland Capital Energy Investments LLC. Pursuant to the SPA, Consumers has agreed to sell to MCV Power its 100% ownership interest in the stock of CMS Midland, Inc., which has a 49% interest in the Midland Cogeneration Venture Limited Partnership (the "MCV Partnership"). The MCV Partnership leases and operates the Midland Cogeneration Venture facility, an approximately 1500 megawatt natural gas-fueled combined-cycle cogeneration facility located in Midland, Michigan (the "Facility"). Also under the SPA, Consumers has agreed to sell its 100% ownership interest in the stock of CMS Midland Holdings Company, which holds a 35% indirect interest in the Facility. These interests represent all of Consumers’ ownership interests in the Facility. The purchase price for these interests is approximately $60.5 million. In conjunction with the sale, MCV Power has agreed to reimburse Consumers for certain obligations in the event that The Dow Chemical Company elects payment under contracts with the MCV Partnership and Consumers to provide it with steam and power. MCV Power will post a letter of credit of up to $85 million to support this reimbursement obligation. See the News Release dated July 25, 2006, which is attached as Exhibit 99.1, for additional information.

The SPA contains a number of customary representations, warranties, covenants and closing conditions. The closing conditions include the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. The SPA also contains indemnification provisions subject to specified limitations as to time and amount. The closing of the transaction is targeted for no later than year-end and the SPA provides that a party not in default may terminate the SPA if closi ng does not occur on or before December 31, 2006. Consumers and CMS Energy cannot predict with certainty whether or when the closing conditions will be satisfied or whether or when this transaction will be consummated.

A copy of the SPA will be filed with CMS Energy’s and Consumers’ future Securities and Exchange Commission ("SEC") filings as required under SEC regulations.

Item 9.01 Financial Statements and Exhibits.

(c) Exhibits.

99.1 Consumers News Release dated July 25, 2006

This Form 8-K contains “forward-looking statements” as defined in Rule 3b-6 of the Securities Exchange Act of 1934, as amended, Rule 175 of the Securities Act of 1933, as amended, and relevant legal decisions. The forward-looking statements are subject to risks and uncertainties. They should be read in conjunction with “FORWARD-LOOKING STATEMENTS AND INFORMATION” and “RISK FACTORS” each found in the MANAGEMENT’S DISCUSSION AND ANALYSIS sections of CMS Energy’s and Consumers’ Forms 10-K for the Year Ended December 31, 2005 and as updated in CMS Energy’s and Consumers’ Forms 10-Q for the Quarter Ended March 31, 2006 (all such “FORWARD-LOOKING STATEMENTS AND INFORMATION” and “RISK FACTORS” sections are incorporated herein by reference), that discuss important factors that could cause CMS Energy’s and Consumers’ results to differ materiall y from those anticipated in such statements.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CMS Energy Corporation
July 25, 2006	By:	Thomas J. Webb
		Name: Thomas J. Webb
		Title: Executive Vice President and Chief Financial Officer

	Consumers Energy Company
July 25, 2006	By:	Thomas J. Webb
		Name: Thomas J. Webb
		Title: Executive Vice President and Chief Financial Officer

Exhibit Index

Exhibit No.	Description
99.1	Consumers News Release dated July 25, 2006

EX-99.1

Consumers Energy Exhibit 99.1
News Release

CONSUMERS ENERGY ANNOUNCES SALE
OF MIDLAND COGENERATION VENTURE INTERESTS TO
GSO CAPITAL PARTNERS AND ROCKLAND CAPITAL ENERGY INVESTMENTS

JACKSON, Mich., July 25, 2006 – Consumers Energy, the principal subsidiary of CMS Energy, has reached an agreement to sell the utility’s interests in the 1,500-megawatt Midland Cogeneration Venture to GSO Capital Partners and Rockland Capital Energy Investments for $60.5 million, the companies announced today.

Consumers Energy owns 49 percent of the MCV Partnership, which leases and operates the facility near Midland, Michigan. Consumers Energy also indirectly owns 35 percent of the facility and along with the other owners leases the facility to the MCV Partnership.

The sales agreement calls for GSO and Rockland to purchase all of the Michigan utility’s interests. GSO and Rockland also will provide Consumers Energy a financial guarantee to back certain contingent obligations.

Consumers Energy is the main customer for the MCV’s electricity output. The utility’s contract to purchase power from the plant, and the associated customer rates, are not affected by the sale.

The sale is the result of a competitive process. Proceeds from the sale will be used to reduce debt at the utility, following a review by the Michigan Public Service Commission.

CMS Energy said if the sale closes this fall, as expected, it would boost 2006 cash flow by about $56 million and reduce 2006 reported and adjusted earnings by about 4 cents per share. The Company said it is maintaining its guidance for 2006 adjusted earnings, excluding mark-to-market impacts, of about $1 per share. CMS Energy does not provide specific reported earnings guidance because of the uncertainties associated with the expected reversal of mark-to-market gains and losses from potential asset sales.

The natural gas-fired MCV facility can produce up to 1,500 megawatts of electricity and up to 1.35 million pounds per hour of industrial steam. It began commercial operation in 1990.

Sustained high natural gas prices led the MCV Partnership to reevaluate the economics of the facility last year. Those high gas prices also led Consumers Energy to examine several long-term alternatives for its MCV interests, including a competitive sale.

David Joos, the president and chief executive officer of CMS Energy, said the sale of the MCV interests reduces CMS Energy’s financial risk. “This sale will reduce our exposure to sustained high natural gas prices and allow us to pay down debt at the utility at a time when interest rates are rising,” he said.

J.P. Morgan Securities Inc. served as financial advisor for Consumers Energy and managed the competitive sale process.

Consumers Energy, the principal subsidiary of CMS Energy (NYSE: CMS), provides natural gas and electricity to nearly 6.5 million of Michigan’s 10 million residents in all 68 Lower Peninsula counties.

GSO Capital Partners LP is an investment advisor specializing in the leveraged finance marketplace. Funds managed by GSO invest in a broad array of assets including private equity securities, mezzanine securities and leveraged loans. The firm has approximately $5 billion in assets under management and has over 90 professionals in New York, London and Houston.

Rockland Capital Energy Investments is a private energy investment company founded in 2003 to focus on the acquisition, development and optimization of companies and projects in the North America and European energy sectors.

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For more information about Consumers Energy, visit our Website at www.consumersenergy.com

Media Contacts: Jeff Holyfield, 517/788-2394 or Dan Bishop, 517/788-2395

Investment Analyst Contact: CMS Energy Investor Relations, 517/788-2590